SOLUTION

I Mid-Term Examination - BBA IV Semester Session 2011-2012 (Even Semester)

Subject: Production & Operations Management (BBA -215)

Time: 90 Mins. M.M.: 20

Notes:
1) Answer all questions from Group A (which is) compulsory, Any Two from group B and Any Two from Group C. 2) All parts of question (a, b etc.) should be answered at one place. 3) Answer should be brief and to the point and with be supplemented with neat sketches. 4) Any missing and wrong data may be assumed suitably giving proper justification. 5) Figure on the right-hand side margin indicate full marks.

Section - A (0.5 x 16 = 8 Marks)

1. Choose the correct answer: i. Practices of Production and Operations Management is applicable to .. (a) Manufacturing (b) Services (c) Both (d) None of these ii. Which of the following is not a function of Production Department? (a) Purchasing (b) Selling (c) Maintenance (d) Quality Control iii. Which of the following is an example of Intermittent Production System? (a) Furniture (b) Medicine (c) Both (d) None of these iv. Which of these production systems has features of both continuous as well as intermittent production system? (a) Batch (b) Job (c) Assembly Line (d) Project v. Plant Capacity is decided on the basis of (a) Current Demand (b) Future Demand (c) Both vi. Work Your Plan is a term related to Production . (a) Planning (b) Control (c) Both (d) None of these (d) None of these

vii. Complete automation of Material Handling is possible in. Layout. (a) Fixed Position (b) Functional (c) Product (d) All of these viii. Which of the following factors will be the most important factor while selecting location for a bank? (a) Nearness to RM (b)NearnesstoMarket(c) Transportation (d) Labour Availability ix. A plant using bulky material should be located near to .. (a) Market (b) Transport (c) Raw-Material (d) In Center x. Assembly Line Balancing is done in . Layout. (a) Product (b) Line (c) Flow-Shop (d) All of these

Which form of Layout will you choose for these production systems? xi. Air Craft Manufacturing Fixed Position Layout xii. College Process/Job-shop/Functional Layout/Fixed Position Layout xiii. Cement Product/Flow-shop/Line Layout xiv. Bank - Process/Job-shop/Functional Layout/Fixed PositionLayout xv. Automobile - Product/Flow-shop/Line/Combined/Grouped Layout xvi. Flyover Fixed Position Layout

Section - B
Attempt any 2 questions. 2. What is Production System? What are its elements? ANSWER:
Production system is the combination of all subsystems or elements, through which inputs are converted into desired output. Production System in a Pictorial Form

(2 x 2=4 Marks)

RESOURCES

INPUTS

PROCESS

OUTPUT

Elements of Production Process or Production System: 1. Input: Inputs are the physical consumables utilized in production process. They mainly consist of raw-material, labor, power and other consumable items. 2. Resources: Resources are those assets which help in transforming inputs into outputs. They mainly consist of Machinery, plant, building, managerial human resource etc. 3. Process: Process refers to a series of operations which are performed on raw-material & other inputs, to transform them to output. 4. Output: Outputs are the product or services resulting from the conversation process.

3. Describe the term Production & Operations Management with suitable diagram. ANSWER: According to E. S. Buffa, Production Management deals with decision making related to production process so that the resulting goods or services is produced according to specification in the amounts and by the schedule demanded and at minimum cost.
MANAGEMENT Planning Organizing Directing Controlling

Use of Management to Production Process

Decision Regarding

RESOURCES

Decision Regarding

Decision Regarding

To have the OUTPUT Quantity as required As per Specification On Scheduled time At a Minimum Cost

INPUTS

PROCESS

4. Write a short-note on Fixed Position Layout. ANSWER: Fixed Position Layout: In this type of layout, the material or major product being produced remains at a fixed location. Tools, machinery & equipments are moved to that location to perform different operations. This layout is used when the material being processed are large, very heavy and difficult to move. For example, Ship building, Railway Coach Manufacturing, Air Craft Manufacturing etc., as for manufacturing these items moving machine, men & equipments will be cheaper in comparison to move semi-finished product. We can compare it with construction of building, we can not move building any where, we have to arrange all factor of construction like material, machines and labor to the site.
Material Equipments Ship Building Yard
Work-in-Progress on Ship

Finished Ship

Labour etc.

Section C
Attempt any 2 questions. 5. Discuss and Differentiate the Product and Process Layouts. ANSWER: 1. Product Layout or Line Layout: This type of layout is also called flow shop layout. Under this layout machines and equipments are arranged in one line according to the sequence of operations, required for the product. Raw materials are fed into the first machine and finished product comes out of the last machine. In between, partly finished goods travel automatically, from one machine to next machine. It is a grouping of machines in one sequence. A product layout may have a straight line shape, a U shape or a circular shape. Generally, we see this type of layout in Automobiles Industry, Sugar Industry, and Cement Industry etc. (4 x 2=8 Marks)

Product A

Lathe (1) Plainer

Drill (2) Grinder (2)

Grinder (3) Miller (3)

Assembler (4) Lathe (4)

Painting (5) Welding (5)

Product B

(1)

In above example Product A is produced using Line 1 and there is a separate line for producing the separate product i.e. product B, even though some of the operations like Grinder is common for both the products but it has been repeated to avoid conflicts and delays. 2. Process Layout: It is also known as Functional Layout or Job-Shop Layout. In this type of layout all machine performing similar operations are grouped and installed at one place. For example, all drilling machine in one room i.e. drilling section, all welding machines in another room i.e. welding section, and all painting in separate room i.e. painting section. Firm may be producing one or several products, which required some or all of these common operations. Material moves from one section to other for different required operations.
(1) Lathe (4) Product A Product B (4) Plainer (1) Miller (3) Assembly Welding (5) (2) Driller (1) (3) Grinder (2) (5) Painting (1)

In above example Product A and Product B both is using the common production facility like common Lathe and Grinder is used for producing both product A & B. Raw-material of product A and B is moving to different sections of operations for getting operated. POINT Definition Suitability Automation Initial Investment Cost of Production Flexibility Type of Machinery PRODUCT LAYOUT Work-centers are arranged in a fixed sequence. Continuous Production System Full Automation Possible High Low Rigid Specific Purpose Machinery dedicated to one product PROCESS LAYOUT Work-Centers do not have any fixed sequence. Intermittent Production System Partial Automation Possible Low High Highly Flexible General purpose machineries, commonly used for all products

6. What are the various Primary Factors, based on which Plant Location decision is taken? ANSWER:
Factors Influencing Plant Location

PRIMARY FACTORS 1. 2. 3. 4. 5. 6. Availability of Raw-Material Nearness to Market Availability of Transportation Availability of Labor Availability of Power Special Grants, Regional Taxes & Import/Export barriers. 7. Industry Concentration 8. 1. 2. 3. 4.

SECONDARY FACTORS Political Factors Legal Factors Natural Factors Religious Factors/Social Factors

Primary Factors: Those factors related to location, which have a direct impact on the cost of production and distribution are kept under this category: 1. Availability of Raw-Material The cost of raw-material is an important element of total cost of production. Two things which should be considered are: Regular & uninterrupted supply of Raw-Material At a minimum total cost (i.e. cost of raw-material + Transportation + Storage) Above two points can be assured by selecting a location near to source of Raw-Material. But again following principles should be followed:

 When the raw-material is heavier than the finished product in weight (e.g. sugarcane-sugar) or raw-material is of perishable nature (Milk-Milk Powder), the factory should located near the raw-material source, as it will reduce the total cost of Raw-Material. o Price of the raw-material will be minimum because of competition o Transportation cost will be minimum because of less distance o Storage cost will be minimum because of less storage 2. Nearness to Market: Nearness to market is important from the point of view of control over the market, as it allow the firm for supplying finished products to customers in a minimum time, adjusting supply according to change in demand. A firm has to generally locate its plant near to market in following cases (keeping the basic objective of minimum cost in mind): If finished product is much heavier than raw-material (Ship Building) If finished product is perishable (like break, sweets etc.) Service Industry (like bank, retailers etc.) 3. Availability of Suitable Transportation Facility: While taking location decision, it should be checked that a suitable and speedy transportation facility should be available for receiving raw-material and sending finished goods. There are mainly five basic modes of physical transportation Air, Road, Rail (train), Water and Pipeline. Suitability of transportation facility depends on the nature of product. Like a firm producing for export will look for availability of water transportation. 4. Availability of Labor: Another factor which should be kept in mind while taking location decision is availability of required labor. This becomes of prime importance if organization is using labor intensive technique of production, as labor is generally less mobile in comparison to other factors. There are two aspects of the factor: Prevailing wage rate of required type of labor at that location Productivity of that labor 5. Availability of Power: In past, when electricity was not enough for production of heavy goods, Coal was generally used for source of power. Coal is a bulky material, so it takes a higher transportation cost. Therefore, it plays an important role in deciding location of such plants near to coal mines, to avoid transportation cost and any interruption in supply. A steel plant requires 400 tons of coal as source of power and 200 tons of iron ore to produce 100 tons of steel. Therefore, coal mines played an important role in location decision of steel plants. Now-a-days, availability of electricity plays important role in location decision. 6. Special Grants, Regional Taxes & Import/Export Barriers: Another important practical consideration while selecting a location for establishing plant is tax benefit/exemptions in excise, custom, sales tax etc. Generally, some governments to attract more capital and industrialization grants certain benefits and tax

holidays, which makes a firm cost efficient and helps in achieving the objective of minimizing cost (e.g. Uttaranchal, SEZs). 7. Industry Concentration: Sometimes firms of same type get concentrated in a particular area. So, all the factors of production providers like labor related to that industry, raw-material provider etc. also get collected around that area creating economies in operations. It also affects the location planning decision of the firm as it minimizes the overall cost of the firm.

7. Data related to an assembly line is given below: Task Time Cutting 20 Seconds Lathe 60 Seconds Drilling 15 Seconds Grinding 15 Seconds Assembling 90 Seconds (a) What is the Cycle Time of current Line? (b) How many units can be produced in an 8 hours day, with this cycle time? (c) What is the current efficiency level of this assembly line? (d) What should be the Cycle Time if we want to produce 960 units in given 8 hours? (e) How many work stations should be used to optimize this assembly line? (f) Draw the optimized assembly line for producing 960 units in an 8 hours day. (g) What is the efficiency level of this optimized assembly line?

ANSWER: (a) Cycle Time of current Line is 90 Seconds (highest individual time taken by any workstation). (b) No. of Units = Available Time / Cycle Time i.e. 8 x 60 x 60 / 90 = 320 units (c) Efficiency Level = Total Work Content / Cycle Time x No. of Work Stations Therefore it is = 200 x 100/ 90 x 5 = 44.44% (d) Cycle Time = Available Time / No. of Units i.e. 8 x 60 x 60 / 960 = 30 seconds (e) No. of Workstations = Total Work Content / Cycle Time i.e. 200/30 = 6.67 i.e. 7 approx 90 (f) Optimized (Best Possible) Assembly line is:
60 20 Cutting Lathe 60 Lathe 30 30 Drilling + Grinding Packing 90 Packing 90 Packing

30

(g) Efficiency Level = Total Work Content / Cycle Time x No. of Work Stations Therefore it is = 200 x 100/ 30 x 7 = 95.24% *****